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Walter Olson

Voters in ten or so states this month turned down proposals to change the way elections are held, and reformers will be taking time to absorb the lessons. But I’d caution against treating this, as some headline writers have done, as a general rejection of ranked choice voting (RCV), which figured in many of the proposed ballot measures. 

Start by distinguishing between two kinds of reform: 1) RCV standing by itself, and 2) the ambitious kind of reform pioneered by Alaska, which abolishes party primaries and then employs RCV in a general election held among the top several finishers. I’ve outlined in several posts why I like the Alaska idea, but voters in five Western states declined, by narrow or wide margins, to adopt versions of it. Meanwhile, Alaska voters themselves appear to be narrowly voting to retain the reforms against a repeal attempt, if current trends hold.

Should we be surprised? For all the promise of the Alaska model as a way to reduce polarization and clear a path for candidates with cross-party support to make it onto the general election ballot, it can seem like a great leap into the unknown, to say nothing of complicated. It’s been road-tested only in one unusual state that isn’t very populous, and only for a few years. No one is quite sure how it will affect the role of political parties, or what strategies candidates may devise to get around the competitive forces the reform is meant to unleash. 

Add in communication and messaging problems, and it’s surprising how well the proposal did —losing by only a 49–51 margin in Montana, 47–53 in Nevada (where it had been on the ballot once before), and 46–54 in Colorado. It’s common for far-reaching reforms to lose at first and eventually start winning as designs are refined and voters grow more comfortable with the idea. That’s what happened with citizens’ redistricting commissions, which started in Arizona and took many years to spread to California and eventually elsewhere.

What about stand-alone RCV, a more familiar reform idea with a much longer track record? Well, despite being turned down by Oregon voters, it continued to gain ground overall, as it has been doing for years. Continuing a long streak of municipal wins, it passed by a convincing 73–27 in Washington, DC, population 680,000, and Oak Park, Illinois, population 50,000.

The politics also differ. In every state where there has been an attempt to introduce the Alaska-style universal primary, it has drawn sustained fire from establishments of both parties. (To their credit, some elected Democrats in Colorado, led by Gov. Jared Polis, did support it this year.) Political machines like that of Harry Reid in Nevada detest these ideas, and so these days do both standard movement conservatives and interest groups that power the Democratic Party, such as progressive clubs and unions. 

All prize the leverage of being able to take down candidates in the party primary if they don’t toe the desired line. On the whole, RCV finds more of a footing in places where politics is dominated by one party—large cities are the model case—and where reformers can pitch it as a way to make primaries work better.

This year, RCV played a crucial role in San Francisco voters’ repudiation of far-left governance, enabling more moderate Democrats to unite through second and third choices against socialist Supervisor Dean Preston, who had led in the first round. That’s just one of many pieces of evidence that reforms of this sort are not somehow stacked in favor of the left side of the political spectrum, but rather, if anything, tend to empower normie voters against obsessives. 

Neal McCluskey

In a bit of a surprise to education watchers, former World Wrestling Entertainment CEO Linda McMahon has been nominated to be the new US Secretary of Education. It comes amidst a renewed push to eliminate the unconstitutional and ineffectual federal Department of Education.

Will McMahon tear the place down?

That’s the wrong question. The right one points to why it is not all that important who the education secretary is.

Neither the secretary, nor her boss the president, gets to unilaterally decide to raze the Department of Education. To end it, Congress must pass a law dissolving it, and then the secretary executes the law. Indeed, that is the job of the executive branch overall—to execute the law, not to make it, which administrations seem to forget all the time.

Hopefully, that is what the Trump administration will do: Work to persuade Congress to pass legislation dissolving the department, sure, but focus on executing the law as it is and not remaking it through executive action, as the Biden administration has tried to do egregiously with federal student loans and, perhaps more arguably, Title IX.

The main thing the secretary should be—until the job is ended—is a good administrator. Current Secretary of Education Miguel Cardona appears to have failed in this regard, most pointedly with the disastrous simplification of the Free Application for Federal Student Aid. Indeed, running federal student aid is the biggest Department of Education function, and it has long been decrepit, perhaps because secretaries have never come from financial backgrounds. A good sign for McMahon is that she has had a successful business career, albeit running steel cage matches and not red tape machines. But she probably knows something about efficiency and effectiveness.

So should we be thrilled or depressed by McMahon’s nomination?

Neither. It is not the job of the secretary to drive the reforms we want. That is Congress’s job. But if and when Congress does the right thing and eliminates the US Department of Education, I hope there is a secretary in place to faithfully and efficiently do as the law commands. As of yet, I have no reason to believe that Linda McMahon is not that person.

Jeffrey A. Singer

In a September blog post, I discussed the encouraging news from the National Center for Health Statistics (NCHS) that drug overdose fatalities decreased from approximately 112,000 to approximately 97,000 during the 12 months ending on April 30, 2024. I speculated that policymakers are increasingly willing to permit harm-reduction organizations to expand syringe services programs, distribute the opioid overdose antidote naloxone, distribute fentanyl test strips, and educate people who use drugs about ways to consume more safely. Last week, the NCHS reported that the trend continued through June 30. Overdose deaths dropped from 113,000 to 97,000 during the 12 months ending on June 30, 2024.

I recently spoke with Abby Rosen, the interim executive director of Sonoran Prevention Works(SPW), one of the oldest and largest harm reduction organizations in Arizona. Abby agreed with my hypothesis. She shared the experiences that the organization’s staff have been reporting. While these reports are anecdotal, staff reports from various and diverse communities across the state have been consistent.

In an email to me, Rosen wrote:

Staff across the state are observing a significant uptick in reported overdose reversals over the past few months. Participants are sharing these instances when they interact with staff at outreach site, SPW trainings, or when they come in to volunteer. Harm reduction tools, like intramuscular naloxone, are making a meaningful impact. These tools are being distributed to people who use drugs, so that they can continue to save others’ lives in their community.

Rosen added, however, that fatal overdoses are not going down equally among demographics and are still disproportionately high in Black and Indigenous communities in the state.

Another factor that might be contributing to the drop in overdose fatalities is the increasing number of people smoking fentanyl rather than injecting it. As drug dealers are increasingly selling fentanyl in pill as opposed to powder form, users find it easier to crush and smoke the drug than to dissolve the powder and inject it. 

In a 2022 Cato online event, Rosen’s predecessor as executive director informed us that SPW was increasingly distributing clean and safer smoking equipment relative to sterile syringes. Public health advocates have encouraged people who use drugs to switch to non-injection routes, which reduce the likelihood of skin, soft tissue, and blood-borne infection. Smoking fentanyl might reduce the likelihood of overdose, as it allows users to more easily titrate the dose to achieve the desired effect, which is harder to do when injecting.

To that point, Rosen wrote that SPW staff have noticed black market fluctuations in fentanyl strength and form that have impacted overdose rates:

The supply, strength, and form of fentanyl continue to fluctuate, and we’re even hearing reports of participants using heroin again—something that hasn’t been available in recent years. When there’s a gap in fentanyl supply, other opioids are filling the void. These changes in drug form (e.g., from pressed pills to powder) significantly increase the risk of accidental overdose, as users may not be prepared for the altered potency of the drug and/​or may be using a route of administration that is unfamiliar to them. For example, pressed pills are usually smoked, while powder is pretty easy to smoke OR inject, and injecting is always riskier. Therefore, education around harm reduction—such as the advice to “go slow” and “never use alone”—must remain a priority. It’s also critical that naloxone is accessible to every person who uses drugs, as well as to those in their communities. (emphasis added)

Rosen agrees that distributing fentanyl test strips (FTS)—still considered illegal drug paraphernalia in Idaho, Indiana, Iowa, North Dakota, and Texas—is saving lives. But staff have had to educate people on how to properly use them.

Many individuals want to know exactly what’s in their drugs so they can take the necessary precautions. While FTS are an effective harm reduction tool, they require proper training and education to ensure they’re used correctly. There’s a significant amount of misinformation circulating about FTS, and SPW is working to combat this by providing accurate training and guidance. Our goal is to equip individuals with the knowledge to prevent accidental overdose through proper use of these tools.

Finally, one cannot understate the benefits of naloxone distribution, which was made more accessible when the Food and Drug Administration reclassified naloxone nasal spray as over-the-counter in March 2023. Unfortunately, injectable naloxone—much cheaper for harm-reduction organizations to purchase—still is prescription-only, requiring a “standing order” from a state-licensed prescriber willing to issue one. (Full disclosure: I have issued the standing order for injectable naloxone for SPW.) Again, quoting Rosen:

SPW distributes around 7,000 naloxone kits per month, each kit containing two intramuscular syringes and two doses of naloxone, along with instructions in both English and Spanish. Since January 2017, we’ve distributed over 1 million doses of naloxone. This distribution has been a critical part of saving lives…

The “Iron Law of Prohibition” states that stricter enforcement of drug laws leads to the proliferation of more potent and dangerous drugs. As I mentioned in September, it is still too early to determine whether the recent trend of decreasing overdose fatalities will continue. After a brief pause in 2018, overdose deaths began rising again in 2019. However, it is already clear that harm-reduction strategies make illicit drug use safer, while tougher prohibition enforcement makes it more lethal.

Adam N. Michel and Chris Edwards

President-elect Donald Trump campaigned on reforming the federal government with spending cuts and overhauling the bureaucracy. He has tasked Elon Musk and Vivek Ramaswamy with leading a Department of Government Efficiency (DOGE) and delivering a report to him by July 4, 2026. At Cato, we are here to help the effort and have proposed many reforms to shrink federal agencies.

However, Trump and Republicans in Congress can’t wait for the DOGE report to start chopping spending. For one thing, they need spending reductions next year to offset the deficit effects of extending and expanding Trump’s 2017 tax cuts. The economic boost from extending the pro-growth elements of the 2017 tax cuts would be enhanced if paired with eliminating low-value spending programs. 

Perhaps more importantly, Republicans must reduce the deficit to avoid a debt-fueled financial crash and prevent another damaging inflation spike. Exit polls from the election reveal that voters were angry about inflation and correctly blamed the massive amounts of new spending passed by President Biden and Congress.

Republicans should learn the inflation lesson—they’ve got to get spending and deficits on a downward trajectory soon after they take office. Another price spike leading up to the 2026 mid-terms could doom their slim congressional majorities.

The good news is that Republicans on Capitol Hill are already talking about spending cut options for 2025. The vehicle for cuts will likely be a reconciliation package, which can be passed with a simple majority in the Senate. Such packages allow cuts to non-Social Security mandatory programs, which currently total about $2.6 trillion in the annual federal budget. 

President Reagan enacted major spending cuts in a reconciliation package seven months into his first year—the Omnibus Budget Reconciliation Act of 1981. The cuts totaled $131 billion over three years, the equivalent of $1.1 trillion today when compared as a share of gross domestic product (or about $3.6 trillion over the ten-year budget window). That would be a good-sized package for the GOP to enact next year. Reagan matched his 1981 budget cuts with pro-growth tax reforms signed into law the same day, which is a model that President Trump should follow.

What should Trump and Congress cut? We scoured the budget and assembled 14 recommendations that would cut about $4.8 trillion over 10 years that Republicans should consider for a reconciliation package.

Reform Federal employee retirement. Trump and Musk have made it clear they want to streamline the federal bureaucracy. One place to start is federal employee compensation. Overall, federal employees are paid 17 percent more than similar private-sector workers, and their benefits are 47 percent higher than similar private-sector workers. Bringing federal retirement benefits into line with the private sector could save $237 billion over ten years. 

Roll back Biden food stamp increase. In 2021, the USDA updated the Thrifty Food Plan to permanently boost SNAP benefits by 21 percent. Congress should roll back this update to save $190 billion over ten years and conform to the previous convention of cost-neutral administrative changes.

Tighten welfare work requirements. SNAP work requirements currently only apply to able-bodied adults without dependents, and states can waive a portion of their work-eligible caseloads from the requirements. Strengthening work requirements for able-bodied adults would improve economic outcomes and save $171 billion over ten years. 

End categorical eligibility. States can automatically enroll individuals in SNAP if they receive even minor benefits from other programs. Repealing this broad-based categorical eligibility would close a loophole that has allowed waste, fraud, and abuse of the program, saving taxpayers as much as $112 billion over ten years.

Cut SNAP junk food subsidies. Trump’s nominee for Secretary of HHS, Robert F. Kennedy Jr., proposes to ban SNAP benefits from being used to buy soda or processed foods. An even larger reform would be to convert SNAP into a fruits-and-vegetables-only program, which would save taxpayers as much as $1 trillion over ten years.

Restrict welfare for immigrants. In 2018, the Trump administration proposed a “public charge rule” to bar entry if the government thinks someone might use welfare. A better approach would be to simply ban access to all means-tested welfare, entitlement programs, and refundable tax credits for individuals who are not citizens. Adopting Rep. Glenn Grothman’s bill to restrict certain Federal assistance could save as much as $1.3 trillion over ten years and even more if expanded to refundable tax credits.

End student loan forgiveness. Biden has stretched the limits of legality in pursuit of forgiving student loans and forcing taxpayers to foot the bill for increasingly out-of-touch universities. Congress should clarify existing laws so repayment plans cannot be manipulated for backdoor forgiveness and end the public service loan forgiveness program, which would save $22 billion over ten years. 

Cap federal student loans. Limiting federal student loans will protect students and taxpayers and reduce pressure on tuition inflation. Eliminating PLUS loans for graduate students, limiting other types of loans, and similar reforms could save as much as $185 billion over ten years. 

Reduce ACA tax credit abuse. The Affordable Care Act (ACA) premium tax credits directly subsidize health insurance premiums on plans purchased through the government-run Health Insurance Marketplace. When the subsidies are overpaid, there are repayment limits, which encourage income underreporting and other fraud. Removing repayment limits would save taxpayers between $44 billion and over $95 billion over ten years.

Stop Medicaid financing gimmick. Most states levy a tax on healthcare providers, which is a financing gimmick to inflate the federal reimbursement for state Medicaid health care costs. Ending the provider tax loophole would save federal taxpayers more than $500 billion over ten years.

Block grant Medicaid. This health program has grown explosively because the federal government subsidizes state program expansion in an uncontrolled manner. The government could save $600 billion over ten years by converting Medicaid to a block grant and limiting growth to a reasonable 3 percent annual rate. 

Expand site-neutral payments. Medicare generally pays more for services performed by hospital outpatient departments than similar services provided in other settings. In 2019, the Trump administration expanded site-neutral payments to a small subset of off-hospital campus clinic visits. Expanding these site-neutral reforms to all services commonly provided in non-hospital settings, as proposed in Trump’s FY 2021 Budget, would save taxpayers more than $100 billion over ten years

Impose stricter limits for bad medical debt. The government reimburses billions of dollars in uncollectible Medicare debts each year, and the HHS Inspector General found that about 15 percent of sampled claims were not compliant with requirements. Stricter limits on Medicare bad debt reimbursement coverage could save between $23 billion and $74 billion over ten years.

Sell Fannie and Freddie. The first Trump administration worked to shore up Fannie Mae and Freddie Mac’s balance sheets before fully privatizing the two government-sponsored enterprises. Congress should instruct the Treasury to sell its $240 billion stake in the companies and amend the charters so that they are truly private and no longer government-sponsored.

Conclusion

Congress should cut spending beyond these modest proposals. But for 2025, these targeted spending cuts, paired with pro-growth tax reform, will put downward pressure on inflation and follow through on Trump’s election promise to streamline the government.

Cutting federal spending is not bad politics, as some people may assume. That was the lesson President Reagan learned from his 49-state landslide victory in 1984 after cutting sensitive programs such as Social Security, Medicare, welfare, and food stamps. Similarly, virtually all the most vigorous spending cutters in the new Republican Congress in the mid-1990s were re-elected in 1996. A far larger political risk for the Republicans is if they don’t cut spending and deficits, and inflation spikes again over the next two years.

Tackling these low-hanging spending reforms will allow the longer-term DOGE project to focus on deeper structural inefficiencies in the federal bureaucracy. A good example is the inefficiency and fraud in the annual federal procurement budget of more than $750 billion. 

Next year, the reconciliation process is an opportunity to extend and improve on the previous Trump tax cuts, to cut low-value spending, and drive down the deficit. Spending cuts will open more budget room for Trump and the Republicans to pass lasting pro-growth tax reforms.

Romina Boccia and Dominik Lett

All eyes are on the Department of Government Efficiency, or DOGE—a Trump initiative to cut wasteful government spending spearheaded by Elon Musk and Vivek Ramaswamy. With dire fiscal projections threatening the American dream, efforts to curb spending and rein in administrative excess should be welcomed. But before DOGE is scheduled to report recommendations no later than July 4 of 2026, the new administration and 119th Congress will face four critical fiscal deadlines in 2025:the return of the statutory debt limit and the expiration of discretionary spending caps; key provisions of the 2017 Tax Cuts and Jobs Act (TCJA); and expanded Obamacare subsidies. 

Each deadline is an opportunity to reshape the fiscal landscape and set America on a sustainable path. Without decisive action, the mounting deficit will fuel inflation, drive up interest rates, and push homeownership and aspirations of a more prosperous future further out of reach for millions of Americans.

The previous administration’s disregard for fiscal sustainability, marked by excessive spending, contributed to sharp increases in inflation (see figure below), one of the major factors costing them the election. As my Cato colleague, Ryan Bourne noted:

“I think that they thought the public would reward them more for a fast recovery, in terms of jobs, than they would punish them for inflation […] I think that proved a huge miscalculation.” 

To avoid repeating these mistakes, Congress and the Trump administration should adopt a comprehensive fiscal strategy to respond to these impending deadlines by reducing spending significantly, to put the budget on a path to balance (see Table 1).

The Debt Limit Returns

On January 1, 2025, the statutory debt limit—suspended under the Fiscal Responsibility Act of 2023 (FRA)—will be reinstated. Without action, the Treasury Department will deploy so-called extraordinary measures to continue meeting federal obligations until those resources are exhausted. Congress must use the debt limit as an opportunity to implement a credible fiscal stabilization plan, pairing any increase with major spending reforms.

Key recommendations:

Establish clear fiscal targets, such as achieving primary balance or stabilizing the debt-to-GDP ratio at no more than 100 percent over the next decade.
Tie debt limit increases to significant spending reductions, particularly through discretionary spending cuts and entitlement reform.
Empower an independent fiscal commission modeled on the BRAC process to insulate entitlement reforms from political pressures.
 

Expiring Discretionary Spending Caps

The binding statutory caps on discretionary spending, reinstated under the FRA for Fiscal Year (FY) 2024 and FY 2025, expire after FY 2025. This will remove a key constraint on discretionary spending, increasing the risk of higher deficits and unchecked growth in non-essential programs.

Key recommendations:

Reinstate discretionary spending caps with a 2 percent annual growth limit over a 10-year period to encourage fiscal discipline.
Close loopholes incentivizing abuse of emergency designations to bypass caps, requiring offsets and stricter budget rules to stop phony emergency spending.
Reduce wasteful or duplicative discretionary programs, such as outdated subsidies and federal funding for state and local responsibilities.
 

The Expiration of Key TCJA Provisions

At the end of 2025, most individual tax provisions from the TCJA will expire, triggering automatic tax increases averaging $400 billion annually over the next decade. Extending these provisions without offsetting spending cuts would worsen already unsustainable deficits.

Key recommendations:

Extend pro-growth provisions within a deficit-neutral framework, including lower individual tax rates and business tax incentives.
Eliminate inefficient tax loopholes and corporate welfare to offset revenue losses and promote economic efficiency.
Pair tax cuts with long-term spending reductions to ensure fiscal sustainability and avoid future tax increases driven by rising deficits.
 

The Expiration of Expanded Obamacare Subsidies

Expanded Affordable Care Act (ACA) subsidies, initially enacted under pandemic relief legislation and extended through 2025 by the Inflation Reduction Act, are set to lapse. These subsidies have increased federal spending significantly without addressing the underlying drivers of high health care costs.

Key recommendations:

Allow Obamacare subsidies to expire, rejecting permanent expansions of temporary programs that contribute to long-term fiscal challenges.
Focus healthcare reforms on reducing government intervention and fostering market competition to improve health care quality and reduce health care prices.
 

Irresponsibility Is Costing Americans Their Future

The US is on an unsustainable fiscal trajectory. With the public debt nearly at 100 percent of GDP and growing rapidly, excessive spending and high debt will produce severe economic consequences, including reduced growth, higher inflation, higher interest rates, and the possibility of severe and sudden austerity when debt financing becomes too expensive. Policymakers must achieve about $8 trillion in deficit reductions over the next 10 years to stabilize the debt at current levels and achieve primary balance (the government’s budget balance excluding interest payments)—and that’s under the assumption that none of the expiring Trump tax cuts will be extended, or if they would be extended that Congress will do so in a deficit-neutral manner.

Addressed irresponsibly, the coming fiscal deadlines outlined above could result in the addition of trillions of dollars to the deficit. Full extension of the TCJA without offsets, for example, is projected to increase deficits by around $4.5 trillion over a 10-year period. Likewise, extending temporarily expanded Obamacare subsidies could cost an additional $335 billion, not including associated interest costs.

On the flip side, even modest discretionary spending caps that increase 2 percent annually could save roughly $500 billion over a 10-year window. More aggressive caps, akin to the Limit, Save, Grow Act of 2023, could save $3 trillion or more. Add a few hundred billion more in additional discretionary savings if Congress can offset just a fraction of the various emergency plus-ups it now passes regularly.

To truly commit to a credible fiscal stabilization plan over the long term, though, policymakers must address the government’s vast network of social transfers, especially old-age entitlement programs like Medicare and Social Security. These programs are projected to grow rapidly due to demographic changes and benefit design, yet they are some of the most politically challenging to reform.

Here, the administration and Congress might harness the positive momentum behind DOGE, establishing an independent fiscal commission with real power akin to the Base Realignment and Closure process used to close outdated military bases. A BRAC-like process could overcome gridlock by providing legislators with sufficient political cover, as it would leave the details of entitlement program reform to outside experts and the approval mechanism to the executive. This could help Congress make meaningful changes to entitlement programs before a fiscal crisis forces draconian austerity.

A Winning Fiscal Strategy for American Prosperity

President Trump and Congress have a choice: stabilize America’s finances or risk leaving future generations a legacy of economic ruin. By cutting spending and lowering deficits, policymakers can restore economic growth, keep living costs manageable, and increase the odds that Americans’ dreams to achieve career success, attain homeownership, and start or expand their families are within reach. Failure to address runaway deficits will not only hurt American families—it could lead to political fallout as voters despise inflation.

The stakes couldn’t be higher. It’s time to do the right thing.

We will delve deeper into these issues in a new policy analysis to be published on January 7. 

Colin Grabow

Whoever leads the incoming Trump administration’s trade team faces a difficult task. In the face of theoretical flaws, historical experience, and, frankly, common sense, they will have to convince Americans that a policy of deliberate inefficiency and increased costs through higher tariffs will somehow make the country better off. But prosperity through higher taxes on imported goods is neither an intuitive nor easily swallowed argument—and mountains of economic evidence show why.

Tariffs’ well-known drawbacks are a defect that Trump’s camp is reportedly already grappling with as they attempt to make the case for a raft of new import taxes. Although the exact contours of their arguments remain to be seen, a study released earlier this year claiming alleged benefits from higher import duties is likely to figure prominently. Try as it might, however, the study did not upend centuries of insight into the virtues of free trade. Indeed, a look under the study’s hood reveals it to be little more than an exercise in economic alchemy.

Released by the Coalition for a Prosperous America (CPA), the study employs a model in which a 10 percent tariff is imposed on all US imports. Surprisingly — at least to those with a passing familiarity with economics — the CPA forecasts the higher tariffs to produce a nearly 3 percent increase in real GDP, a 4.77 percent rise in manufacturing output, 5.7 percent higher household incomes, and an additional 2.8 million jobs. Incredible stuff.

Here’s the core argument:

The tariff makes imports less competitive and domestic production of manufactured and other goods rises to take advantage of the opportunities. Increased domestic production leads to more jobs and more capital investment. The stimulus to the goods-producing sector flows through to the services sector, with the result that the entire U.S. economy expands.

Essentially, imports are replaced with domestically produced goods that lead to salutary effects for the broader US economy. But this flies in the face of accepted economic wisdom, chucking established concepts such as comparative advantage and the virtues of specialization out the window. 

As economists Joseph Francois and Robert Koopman detailed in a September letter, the CPA study arrives at its numbers by using several assumptions untethered from economic reality and expert consensus. Among them:

The United States enjoys excess capital and labor. For American workers and businesses to pick up the slack created by reduced imports, there must be workers and capital that can be deployed to new uses. But as Francois and Koopman point out, the United States has been running near full employment (absent a relatively sharp but brief COVID-19 pandemic spike, unemployment has been under 5 percent for over eight years). There aren’t many workers or capital laying idle.
Tariffs will prompt the US economy to become more productive. For the US economy to increase its output (as the CPA study claims), it would have to become more productive. But that doesn’t follow at all. If Americans were relying on imported goods instead of domestic goods prior to a tariff’s introduction, that’s a key sign that the imported product was being produced more efficiently. Replacing efficiently produced imports with less efficiently produced domestic goods is the opposite of a productivity boost. Furthermore, approximately half of all US imports are inputs for US firms. Raising the cost of those inputs via tariffs — think, for example, imported robots and machinery for US factories — is hardly a formula for efficiency and productivity. None of this makes sense.
Foreign retaliation goes unmentioned. If the United States imposes tariffs on foreign goods, it should expect foreign governments to respond in kind. Such retaliation happened after the 1930 Smoot-Hawley tariffs and after the Trump administration slapped tariffs on goods from China and Europe (among other examples). Countries are already threatening to do it again if Trump proceeds with new tariffs. Suffice it to say, such retaliation will compound the damage of new tariffs by putting US exports at a competitive disadvantage. Yet higher tariffs on US exports and their effects go unmentioned by the CPA study.

But the case against tariffs doesn’t merely rest on the CPA study’s flawed assumptions. We also have plenty of actual experience and scholarly research to draw upon. Most notably, a US International Trade Commission report that examined the tariffs during President Trump’s first term found that duties on steel and aluminum led to the protected industries (e.g., US steel mills) increasing their output by an average of $2.8 billion ($1.5 billion for steel and $1.3 billion for aluminum) per year, certain industries subject to higher steel and aluminum costs saw their annual output decline by an average of $3.4 billion. 

The USITC found that the downstream industries most harmed by higher costs included industrial machinery manufacturing, general-purpose machinery, and agriculture, mining, and construction manufacturing. Thus, and directly contrary to what tariff advocates are reportedly claiming today, the USITC calculated an annual net economic loss of around $600 million.

And that’s just for the directly affected US industries examined. As my colleagues Clark Packard and Scott Lincicome wrote on this blog in August, more than a dozen studies by university economists, think tanks, and government agencies have examined these tariffs and have found other economic harms. The general consensus: “Americans faced significant losses from the tariffs (and inevitable foreign retaliation), including higher tax burdens and prices, loss in wages and employment, reduced consumption, decreased investment, a decline in exports, and overall aggregate welfare.”

The benefits of free trade and the costs of tariffs remain straightforward, rooted in compelling economic logic, and supported by piles of empirical research. Tariffs’ net economic harms are one of the few issues on which almost all economists — left, right, and center — agree. Raising costs and introducing barriers to the efficient production of goods — and inviting other countries to respond in kind — will harm American consumers and businesses and ultimately harm the US economy overall. Try as protectionists might to prove otherwise, protectionism remains an economic loser, and no amount of alchemy will change that fact.

James A. Dorn

In the history of economic thought, it is often found that what at first appears as a new idea can often be traced back to earlier work, which was lost sight of. Such is the case with Benjamin M. Anderson’s article, “Capitalism versus Socialism in the Light of the Present World Economic and Financial Situation,” published in June 1922, in the Chase Economic Bulletin (Vol. 2, No. 3). A careful reading of that article clearly shows that Anderson was a precursor of F. A. Hayek on the so-called knowledge problem—that is, how to utilize the particular knowledge dispersed among millions of individuals to allocate society’s scarce resources to satisfy human wants.

Hayek on the Knowledge Problem

Friedrich Hayek first discussed the knowledge problem in his presidential address before the London Economic Club, November 10, 1936. His remarks, titled “Economics and Knowledge,” appeared the following year in Economica (Vol. 4, new series, 33–54). In that article, Hayek argues that “economics has come nearer than any other social science to an answer to that central question of all social sciences: How can the combination of fragments of knowledge existing in different minds bring about results which, if they were to be brought about deliberately, would require a knowledge on the part of the directing mind which no single person can possess?”

The knowledge problem can be solved, according to Hayek, once it is recognized that under certain conditions “the spontaneous actions of individuals will … bring about a distribution of resources which can be understood as if it were made according to a single plan, although nobody has planned it.” Those conditions include private property rights, a just rule of law, free-market pricing, and knowledge of alternatives. 

In 1945, Hayek expanded his discussion of the knowledge problem in his famous article, “The Use of Knowledge in Society,” published in the American Economic Review (Vol. 35, No. 4, 519–30). The key points in that article are:

“The economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place.”
“The ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization.”
“We need decentralization because only thus can we ensure that the knowledge of the particular circumstances of time and place will be promptly used. But the ‘man on the spot’ cannot decide solely on the basis of his limited but intimate knowledge of the facts of his immediate surroundings. There still remains the problem of communicating to him such further information as he needs to fit his decisions into the whole pattern of changes of the larger economic system.”
“Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people.”
“The mere fact that there is one price for any commodity—or rather that local prices are connected in a manner determined by the cost of transport, etc.—brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process.”

Hayek’s insights into the institutional infrastructure of a free-market economy, the transmission of relevant information via the price and profit system, and the spontaneous order that arises when people are free to choose, in contrast to central planning, were recognized by the Royal Swedish Academy of Sciences in awarding him the 1974 Prize for Economic Science in Memory of Alfred Nobel.

In his presentation speech, Professor Erik Lundberg of the Royal Academy of Sciences stated: 

It is above all the analysis of the viability of different economic systems which is among Professor Hayek’s most important contributions to social science research. From the middle of the 1930s onwards, he devoted increasing attention to the problems of socialist central planning. In this area, as in all others to which Hayek has devoted research, he presented a detailed exposition of ideas and conceptions in this field. He evolved new approaches in his examination of fundamental difficulties in “socialist calculation” and investigated the possibilities of achieving effective results through decentralized “market socialism”. His guiding criterion in assessing the viability of different systems refers to the efficiency with which these systems utilize the knowledge and information spread among the great mass of individuals and enterprises. His conclusion is that it is only through a far-reaching decentralization in a market system with competition and free price formation that it is possible to achieve an efficient use of all this knowledge and information. Hayek shows how prices as such are the carriers of essential information on cost and demand conditions, how the price system is a mechanism for communication of knowledge and information, and how this system can mean an efficient use of highly decentralized resources of knowledge. 

Over the last 50 years, Hayek’s pioneering work on the use of knowledge in society has spawned a wide range of research on the importance of understanding the institutional framework for a free-market system, especially the essential role of private property rights and the free flow of information for creating a harmonious social and economic order. 

Benjamin M. Anderson: Precursor of Hayek on the Knowledge Problem 

When Hayek wrote his landmark articles on the knowledge problem, in 1936 and 1945, he was at the London School of Economics. In those articles, he did not cite the work of American economist Benjamin M. Anderson (1886–1949), whose 1922 article in the Chase Economic Bulletin touched upon many of Hayek’s key insights regarding the use of knowledge in society. Hayek surely would have cited Anderson’s article on “Capitalism versus Socialism” if he had read it. 

The following are some of the key passages related to the knowledge problem from Anderson’s 1922 article; the parallels to Hayek are evident.

“Under this system of free, private enterprise with free movement of labor and capital from industry to industry, the tendency is for an automatic balance to be maintained and for goods and services to be supplied in right proportions. A social order is created, a social cooperation is worked out, largely unconscious and largely automatic, under the play of impersonal forces of market prices and wages.”
“The success of this system, however, depends upon its flexibility and the quickness with which readjustments can be made, and this, in turn, depends largely upon the extent to which it is competitive and free from unified conscious control. If a government or a collective system undertakes to regulate the business of a country as a whole and to guide and control production, there is required a central brain of such vast power that no human being who has yet lived, or can be expected to live, can supply it.”
“When millions of people are working, each at his own special problem, studying his own special market, making his readjustment piecemeal, under the guidance of market prices, the problem is manageable. If a central brain must do the thinking for all of them, chaos is inevitable. Great mistakes are made and these mistakes are carried much further than would be possible under the competitive system, controlled by free prices.”
“When the markets are satisfied that prices are free from artificial control and that they really reflect conditions of supply and demand, goods move and production can go on.… Right prices may be defined as prices which will move goods and which, through clearing the markets, permit new goods to be produced. The best way to determine what right prices are is not by a priori calculation, but rather by experimentation in the open, two-sided, competitive markets.”

A Free Market for Ideas

Both Hayek and Anderson recognized the importance of a free market for ideas in generating knowledge of alternatives and, thus, in the formation of market prices that reflect opportunity costs and individual preferences. Both saw the dangers to economic freedom and social coordination from price controls and erosion of private property rights. Their message was “institutions matter,” and that the relevant knowledge of time and place, which is dispersed among millions of individuals, cannot be duplicated by central planning and control. Those lessons are well worth repeating as we celebrate the 50th anniversary of Hayek’s Nobel Prize. 

Andy Craig

“…in Case of Disagreement between [the House and Senate], with Respect to the Time of Adjournment, [the President] may adjourn them to such Time as he shall think proper.” — Article II, Section 3 

The presidential power of adjourning Congress has never been used. There are no precedents and scant commentary about what it means, or exactly what triggers it. But now, there is credible consideration of the idea being discussed, as part of Trump’s demand for an adjournment to let him use recess appointments to completely bypass the Senate confirmation process. It wouldn’t be the first time the issue has come up, as Trump briefly floated it during his first term, and Speaker Mike Johnson has refused to rule out possible support for the scheme. 

It is important, then, for us to quickly get a handle on exactly what this obscure bit of constitutional text means and what it does, and doesn’t, allow the president to do. 

The possibility is uncomfortably suggestive of one of the most firmly repudiated ideas in Anglo-American law, the attempt by Charles I to rule without Parliament. That did not end well, to put it mildly, for either side of the dispute or the nation as a whole. It was an example the Framers of the Constitution were very aware of, and consciously sought to avoid by explicitly constraining the chief executive’s power to interfere with the legislature. 

As Ed Whelan writes at NRO, the basic outline of the idea is as follows: the House (presumably more amenable, though that’s far from certain with a razor-thin Republican majority) would pass a concurrent resolution adjourning Congress, which is the normal procedure. The Senate would not concur. Trump could then cite this as the two houses being in “disagreement,” and adjourn them to whenever he wants. To allow for recess appointments would require an adjournment of at least ten days. But in theory, it could extend nearly an entire year, until the next constitutionally mandated annual convening of Congress on January 3, 2026, per the 20th Amendment. 

Would this scenario actually be a “disagreement … with respect to the time of adjournment” as contemplated by the Constitution? It would appear to be so as a practical matter, but I would contend not as a formal procedural posture. In short, the House passing an adjournment resolution while the Senate simply takes no action would not be a disagreement between them. (For clarity, I will assume the scenario of the House trying to adjourn while the Senate opposes it, though the same analysis would apply vice versa). 

Disagreement requires conflicting action on the part of both the House and the Senate. They must each pass adjournment resolutions, specifying different proposed dates. This is both a fairer reading of the clause’s plain language and a necessary construction to avoid absurd results. In practice, this means the Senate can prevent a presidential adjournment by not taking any action to officially disagree with the House. 

Even in the normal course of business, the two houses do not act simultaneously. Between an adjournment resolution passing one chamber, some time elapses… minutes, hours, days… before the other chamber can concur. If mere non-action suffices to create a “disagreement,” then the president could intervene during this window any time Congress adjourns. This was plainly not the intent, nor would it be a reasonable definition of the word disagreement. 

A disagreement only occurs when one house actually expresses its disagreement with the other. This requires action, not simply inaction. It means adopting a conflicting adjournment resolution of its own. Or at the very least, to take a floor vote and affirmatively reject the proposed adjournment resolution, which the Senate has no obligation to do. Until then, the Senate might still agree with the House and has not said otherwise. While the political reality might be apparent, no formal mechanism of disagreement would have been triggered. 

Another reasonable argument could also be had over if the House wishing to adjourn, while the Senate does not wish to adjourn, is a disagreement over the “time” of adjournment. This qualifier must be read to mean something, under the canon against interpreting constitutional language as mere surplusage. Otherwise, the provision would read disagreement over adjournment and not only over the time of adjournment. The former would not be a conflict over scheduling the action in question, but over whether to do it at all, at any time. Compare the Constitution’s other time-setting powers, for Congress to exercise over presidential and congressional elections, and it becomes obvious that setting a time is something different from deciding whether to ever do the thing in question. 

More to the point, what happens if the president plus the House has purported to adjourn Congress, but the Senate does not accept this as valid? Either on one of these interpretations or some other, such as the idea that presidential adjournment only applies to special sessions called by the president, as suggested by my colleague Thomas Berry. Other theories would involve the interaction between dates set by statute and adjournment by non-statutory mechanisms, distinctions between the power to adjourn both houses of Congress as opposed to adjourning only one of them, or arguments over who has the power to re-convene the Senate and on what authority. 

At this point, the correct course of action would be for the Senate to simply continue to meet at its previously appointed times and conduct business. A majority would still constitute a quorum. If the president’s proclamation of adjournment is null and void, there is no way for the Senate to assert that position other than treating it as a nullity, an act with no more force than if you or I tried to adjourn Congress. 

This scenario would be well into a full-blown constitutional crisis, to be sure, a Senate whose very existence is denied by the president and the House. Vice President Vance, as president of the Senate, could show up in-person at the Capitol and reiterate the position that the body is adjourned. Though this quickly becomes a rather absurd contradiction: if the Senate is not in session, there is nothing for the Vice President to preside over. Claiming the gavel would be conceding the point. And if he declines to claim his constitutional power to preside, the job would pass per the normal rules of the Senate to the president pro tempore or their designee. 

All of this so far offers little opportunity for direct judicial intervention, any clear path for anybody with standing to present a justiciable case. But since the whole goal of the exercise would be for Trump to make recess appointments to the executive branch, this would squarely tee up a challenge in line with NLRB v. Canning to the legitimacy of those appointments, by anybody affected by their purported actions. And though Canning was not directly about the presidential adjournment power, it does stand for the general proposition that the Senate is in session when the Senate says it is in session. This follows from the fact that each house has the power to determine the rules of its proceedings, including deciding disputes over those rules. If the Court were to either reject or validate the claimed recess appointments, that would effectively decide the underlying issue. 

All this may well be moot, and we can certainly hope it remains theoretical. The White House could back away from the idea of trying to adjourn Congress. As few as two or three Republican defectors in the House could deny the needed majority there, so there would be no basis to claim disagreement between the houses. The Senate may proceed to confirm most if not all of Trump’s Cabinet nominees, with the demand for recess appointments falling by the wayside as a consequence. Or the Senate could hold firm and reject nominees, defending its constitutional prerogative.

But if the presidential adjournment power is invoked, it should be recognized as not just a serious, norm-defying abuse of a procedurally valid constitutional power. Instead, it would in fact be unconstitutional. The Senate would have firm grounds to ignore it, and the Supreme Court could reasonably agree. 

Vanessa Brown Calder

President-elect Donald Trump has signaled an appetite for change with his new Department of Government Efficiency and various cabinet picks. While many federal programs and regulations need an overhaul, childcare policy is an overlooked area that is ripe for a new approach.

For parents of young children who utilize formal childcare, it is one of the most significant child-rearing costs. At the high end, annual infant care costs are quoted at an eye-popping $24,243 in Washington, DC, and $20,913 in Massachusetts. Historically, federal policymakers have tried to solve childcare affordability issues by doubling down and expanding childcare subsidies. Recently they have dug their heels in on this approach.

This fall, Representative Ro Khanna (D‑CA) proposed a bill capping childcare costs at $10 per day for all families earning less than $250,000 annually. Over the summer, Senators Tim Kaine (D‑VA) and Katie Britt (R‑AL) proposed expanding various existing childcare subsidies, including the Child and Dependent Care Tax Credit (CDCTC).

Meanwhile, the Biden administration unsuccessfully proposed fully subsidizing some families’ childcare and capping other families’ childcare costs at 7 percent of income. Biden’s plan would have the government subsidizing childcare demand and supply (although the American Families Plan failed, some of the childcare ideas were rolled into a subsequent Biden executive order).

Proposals like these are enormously costly, raise the market price of care, and favor working families that use childcare over working families that don’t, like families with stay-at-home parents. Government policy should be neutral regarding family work-life decisions rather than favoring the dual-earner model.

The new administration would be smart to take a different approach and refocus on the root cause of high costs and waiting lists. A significant portion of access and affordability issues in the childcare sector are driven by restrictive local regulations, sometimes encouraged by federal policy. 

Studies find that childcare regulations reduce care affordability and access. A variety of regulations are undoubtedly to blame, but research indicates that educational requirements for staff and staff-to-child ratios are especially important.

A simple comparison of state regulation and cost data supports this idea. For instance, as educational requirements increase for daycare center directors, the average cost of care nearly doubles. The average cost of infant care is $10,018 in states with no or minimal educational requirements, while the average cost is $19,354 for states that require a bachelor’s degree for daycare center directors.

The cost of childcare is also higher in states with restrictive educational requirements for daycare center teachers: the average cost of infant care in states without educational requirements is $9,586, whereas the average cost of care is $18,285 in states that require an associate’s degree for center teachers.

Just as greater educational requirements for would-be carers limit the supply of childcare staff, restrictive child-to-staff ratios and maximum group sizes limit the supply of “seats” at childcare centers. Data also support a link between these regulations and costs: the average cost of care nearly doubles as the child-to-staff requirement moves from 5 children per staffer to 3 children per staffer.

Regulators claim that these and other childcare regulations increase the quality of care: when Washington, DC, implemented a rule requiring that childcare providers have a college degree, supporters and officials argued that it would benefit DC’s disadvantaged children and that educational requirements would increase staff pay.

But increasing requirements so that some staffers lose their jobs is an ill-considered strategy for “raising” staff pay. More importantly, research indicates that regulating daycare reduces options for low-income families, who respond by sending their children to lower-quality home-based care. 

Rather than doubling down on failed policy, the incoming administration should focus on rolling back costly regulations that limit supply and access to care. It can revoke Biden’s childcare EO and use its influence to refocus the conversation on local government policy. 

For its part, Congress should eliminate federal laws that worsen credentialism in the childcare sector. It can start by removing the requirement that Early Head Start staff have a CDA and be trained in child development and that half of Head Start teachers have at least an associate’s degree in early childhood education or a related area. Local policymakers have admitted that federal policies like this have encouraged them to implement more restrictive childcare regulations locally. 

These reforms would constitute a radical change in the direction of childcare policy, and paired with serious efforts to reform local regulation, they would make a difference. 

Colleen Hroncich

“The more that I, as a parent, learned about Charlotte Mason principles, the more I realized that this woman was way ahead of her time,” says Andy Zawacki, Head of School at Arborbrook Christian Academy in Charlotte, North Carolina.

Arborbrook was founded in 2005 by four homeschooling families who wanted a Charlotte Mason-based education for their own children and others in the area. In the first year, it served 40 students K‑8, mostly homeschoolers. The school grew rapidly, both in enrollment and grades offered. By the fifth year there were 170 students in grades K‑11. “We’re at 270 students now without much room for more growth,” says Andy. “We currently have two sections of every grade in K‑7 and one section in the upper school, grades 8–12. But that trend is continuing, so K‑8 next year will have two sections. We’re looking to build a building to accommodate the growth.”

In the lower school, which includes grades K‑6, they have what they call Alpha and Omega time where they start and end their days with God. On Mondays and Wednesdays, they start with classroom devotions and prayer time. On Tuesdays and Thursdays they have assemblies. The classes rotate sharing about the chosen theme on Tuesdays and Andy generally shares a message building off that on Thursdays. Omega time at the end of each day for K‑6 is Bible class so they receive that right before they head home.

In between Alpha and Omega time, the day is full of short, fast-paced lessons. “We’re not rushing them, but we are moving them from subject to subject, special to special, ideal to ideal to give them a very robust feast throughout the school day that is all laced in the Charlotte Mason philosophy of education,” Andy explains. 

Arborbrook includes the academic coursework and enrichment classes that parents expect in a private school. But it’s the nature component that makes the school unique in the area. “As a Charlotte Mason school, this is part and parcel of her philosophies. Get children outside, get them learning, get them in the dirt, help them make observations,” says Andy. “We have a fantastic nature studies program where they’re growing their own gardens, they’re reaping the harvest from those, and having a salad party.”

The upper school, grades 7–12, follows a block schedule with Monday/​Wednesday classes and Tuesday/​Thursday classes that meet for 90 minutes. They have core subjects of math, English, history, science, and Bible. The other classes vary by grade. In junior high, they have a specials block and a writing workshop based on Charlotte Mason principles. High school juniors and seniors can take dual enrollment courses that give them high school and college credits.

There are also required classes meant to prepare students for life after high school. For example, freshmen take a special PE/​health class that combines practical, hands-on skills training and classroom instruction to provide basic foundational life skills in the area of fitness and health. Sophomores take a Christian leadership class with Andy. Juniors have a junior seminar class to walk them through the college application process. And seniors have an advanced apologetics class that Andy says includes “subjects not yet covered that they need before they launch out into the world.” 

On the dual enrollment front, Arborbrook has a rather unique program. Andy had a previous relationship with Ocean County College, a community college in New Jersey, so he asked them about partnering for dual enrollment. “We get certified as professors by the college, and we teach the courses embedded into our program here. So the students get college credit and high school credit while they’re here. They can graduate with 33 or 36 college credits just taking courses here. They also have online courses that they can take if they want,” Andy explains. The college already ran similar programs with local high schools, but Arborbrook is their only extension partner so far.

According to Andy, the North Carolina Opportunity Scholarship is helping Arborbrook families. Last year, the legislature made the program universal, meaning every North Carolina family is eligible to apply. Scholarship amounts are higher for lower-income families. However, under current funding levels, there is a waitlist of around 55,000 students who did not receive scholarships due to lack of funding. As funding increases, “that will be a big game changer for our school as a whole and I think every private school,” Andy says. “I never thought I’d see the day, but here we are on the precipice of it. That will be a tremendous blessing and change for our families.”

Andy is thankful that he found Charlotte Mason and has seen the fruits of the model in his own children. “I encourage parents to exercise your freedom to be able to find things that are out there that really resound with you as an educator or as a parent for your children’s education,” he says.